Ramsey prices, average cost prices and price sustainability

Leonard J. Mirman; Yair Tauman; Israel Zang

doi:10.1016/0167-7187(86)90026-3

Ramsey prices, average cost prices and price sustainability

Leonard J. Mirman^*, Yair Tauman, Israel Zang

^*Corresponding author for this work

Coller School of Management

Research output: Contribution to journal › Article › peer-review

Abstract

We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.

Original language	English
Pages (from-to)	123-140
Number of pages	18
Journal	International Journal of Industrial Organization
Volume	4
Issue number	2
DOIs	https://doi.org/10.1016/0167-7187(86)90026-3
State	Published - Jun 1986

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10.1016/0167-7187(86)90026-3

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abstract = "We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.",

author = "Mirman, {Leonard J.} and Yair Tauman and Israel Zang",

note = "Funding Information: *We wish to thank D. Spulber for helpful discussions and comments. We also acknowledge the partial support from the NSF through Grant no. SES-81-06207 and the Israel rnstitute of Business Research at Tel Aviv University.",

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Ramsey prices, average cost prices and price sustainability

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